FACT CHECK: “FOUR PINOCCHIOS FOR ‘KING OF BAIN'”

10:01 AM, January 13, 2012 |

“The manipulative way the interviews appeared to have been gathered for the UniMac segment alone discredits the entire film.” – The Washington Post’s “The Fact Checker”

“Four Pinocchios for ‘King of Bain’”
The Washington Post
By Glenn Kessler
January 13, 2012
http://www.washingtonpost.com

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Newt Gingrich, meet Michael Moore!
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Let’s take a look at some of the claims in “King of Bain.” The video clip above is from a 60-second commercial aired by “Winning Our Future.” The full video can be found here. As we will demonstrate, at least some of the interviews of ordinary citizens appear to have been conducted under misleading pretenses and have been selectively edited to leave a false impression.

The Facts

First of all, it is a stretch to portray Romney as some sort of corporate raider, akin to Carl Icahn (whose image is briefly seen). Bain Capital initially was in the business of providing venture capital — seed money — for start-ups, such as Staples. Then it moved to the more lucrative business of private equity, in which Bain won control of firms, reorganized them and then sold them for profit. (Our colleague Suzy Khimm earlier this week did an excellent job of explaining the two sides of Bain Capital.)
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The closure of the UniMac plant in Marianna, Fla.
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In the film, three former employees of UniMac, which makes commercial washing machines, appear to suggest that quality went down under Bain Capital’s management and that a plant in Marianna, Fla., was closed because of Romney’s actions.

But the chronology is all jumbled. Bain Capital bought the business from Raytheon in 1998, and Romney left Bain a year later to run the Winter Olympics in Salt Lake City. In 2005, Bain sold UniMac (also called Alliance Laundry) to a Canadian entity known as Teachers’ Private Capital. The factory was moved from Marianna to Ripon, Wisc., in 2006, after Bain’s involvement ended — a fact made clear on the Web site of a laundry repair business co-owned by the people featured in the film.

In fact, Mike Baxley, who was interviewed for the film, said that he and his partner had “absolutely no idea” that the interviews were for a film about Romney and Bain. He said they thought they were being interviewed for a documentary about the factory closing.

“They said they wanted to know what it was like when the factory closed down,” he said, and he, his partner and his partner’s wife agreed to interviews after “they flashed a little money at us.” (Baxley, a Republican who said he had not yet thought much about the nomination contest, declined to reveal the amount.)

After watching “King of Bain” at The Fact Checker’s request, he said: “We were pretty shocked. Our quotes were seriously taken out of context. There is a real lack of facts.”

Indeed, Baxley, Tommy Jones and Tammy Jones barely mention Romney and Bain as they talk about their angst about the factory closing; the narrator of the film inserts suggestions that Romney was responsible.

The film suggests that UniMac is out of business, but Baxley noted that UniMac is still going strong at its new headquarters in Wisconsin. He said that the same upper management team ran the company during the course of the various investments by outside partners such as Bain, and that Bain appeared to have little involvement in UniMac’s management.

The bankruptcy of KB Toys
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Here again, the chronology is off. Bain Capital did not buy KB Toys until late 2000, more than a year after Romney left for the Olympics. But the film states, “Romney and Bain bought the 80-year-old company in 2000, loaded it with millions in debt.” It then attributes the failure of KB Toys in 2008 to that debt load, without noting that a horrible retail environment wiped out a number of chains, particularly toy stores.

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The bankruptcy of DDi

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According to an Aug. 26, 2003, account in the Orange County Register, which the film cites as a source, Bain Capital under Romney’s leadership invested $46 million in DDi in 1997. It sold many of its shares for at least $93 million and received a $10 million management fee, but the newspaper said Bain retained a 14 percent stake in the firm that was wiped out when DDi filed for bankruptcy during the dot-com bust. (The film suggests Bain had sold all of its shares, saying it had “dumped the rest.”)

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The film, while focusing on the 2,200 jobs that were lost during the technology bust, does not mention that DDi emerged from bankruptcy proceedings and is currently thriving.

The demise of the Ampad facility in Marion, Ind.
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Finally, the film comes to a case that directly involves Romney. As mentioned before, this transaction formed the core of Ted Kennedy’s ad war against Romney, and the interviews in those ads are raw and on point. Clearly, people in Marion are still angry at Bain’s role in the demise of the facility there.

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One former Ampad employee claims Romney has 15 homes, which is simply not correct; he or his wife appear to have three homes (though worth almost $20 million), according to PolitiFact.

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The Pinocchio Test
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Only one of the four case studies directly involves Romney and his decision-making, while at least two are completely off point. The manipulative way the interviews appeared to have been gathered for the UniMac segment alone discredits the entire film.